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By: Bill Kauffman  |  October 06, 2021

Skilled Nursing Occupancy Continued Slow Recovery in July

Market Trends  |  Skilled Nursing


Reimbursement differential between Medicare fee-for-service and managed Medicare hits record.


NIC MAP® data, powered by NIC MAP Vision, released its latest Skilled Nursing Monthly Report on September 30, 2021, which includes key monthly data points from January 2012 through July 2021.

Here are some key takeaways from the report.

Skilled nursing property occupancy increased for the sixth consecutive month in July, gaining 58 basis points from June to end July at 75.0%. Occupancy is now up 355 basis points from the pandemic low of 71.4% reached in January. Despite the improvement, occupancy remains very low compared to the pre-pandemic February 2020 level of 85.5%. More recently, the Delta variant has challenged the occupancy recovery as some areas of the country have experienced hospital capacity constraints which in turn have caused elective surgeries to slow. This can have a direct impact on skilled nursing occupancy as referrals from hospitals may decline as a result. Staffing is also a challenge as some operators are unable to hire an appropriate number of staff to accept admissions for new patients into their properties.

SNF occupancy July 2021

Medicare revenue per patient day (RPPD) held steady from June to end July 2021 at $560. However, Medicare RPPD has declined throughout the year dropping 1.5% from January 2021 when COVID-19 cases were elevated at skilled nursing properties. During the pandemic there has been support from the federal government to increase Medicare fee-for-service reimbursements for COVID-19-positive patients requiring isolation. RPPD has now declined and one possible reason is lower property-level case counts. Medicare RPPD has decreased 2.2% from the pandemic high set back in June 2020. Medicare revenue mix increased from June to July. However, it has also been trending down since January 2021, dropping 431 basis points to 20.3%. This suggests that, in addition to lower RPPD, utilization of the 3-Day Rule waiver declined as COVID-19 cases declined relative to the month of January. The 3-Day Rule waiver was implemented by Centers for Medicare and Medicaid Services (CMS) to eliminate the need to transfer positive COVID-19 patients back to the hospital to qualify for a Medicare paid skilled nursing stay.

Following four months of decline, Medicaid revenue per patient day (RPPD) increased from June to end July at $241. Medicaid RPPD was trending downward after hitting a high of $243 in February this year. However, this latest monthly data shows a 3.7% increase from February 2020, prior to the pandemic. Medicaid reimbursement has increased more than usual as many states embraced measures to increase reimbursement related to COVID-19. On the other hand, covering the cost of care for Medicaid patients is still a major concern as reimbursement does not cover the cost in many states. In addition, nursing home wage growth is elevated, as is inflation measured by the Consumer Price Index, and staffing shortages are a significant challenge in many areas of the country. Expectations are that wage growth will remain elevated as staffing challenges persist with turnover and competition for labor from other industries.

Managed Medicare revenue per patient day (RPPD) declined further in July and was down 4.5% from a year ago. The continued monthly decline in managed Medicare revenue per patient day creates additional challenges to skilled nursing operators during the COVID-19 crisis as the reimbursement differential between Medicare fee-for-service and managed Medicare has accelerated during the pandemic. Medicare fee-for-service RPPD ended July 2021 at $560 and managed Medicare ended at $447, representing a time-series record differential of $113.  Pre-pandemic, in February of 2020, the differential was $95.  As Medicare Advantage enrollment now represent 46% of all eligible Medicare beneficiaries, and continues to grow, operators must find ways to adjust such as opening their own insurance plans.

SNF RPPD July 2021

To get more trends from the latest data you can download the Skilled Nursing Monthly Report here. There is no charge for this report.

The report provides aggregate data at the national level from a sampling of skilled nursing operators with multiple properties in the United States. NIC continues to grow its database of participating operators in order to provide data at localized levels in the future. Operators who are interested in participating can complete a participation form at NIC and NIC MAP Vision maintain strict confidentiality of all data received.


Interested in learning more about NIC MAP data? To learn more about NIC MAP data, powered by NIC MAP Vision, and about accessing the data featured in this article, schedule a meeting with a product expert today.

About Bill Kauffman

Senior Principal Bill Kauffman works with the research team in providing research and analysis in various areas including sales transactions and skilled nursing. He has lead roles in creating new and enhanced products and implementation of new processes. Prior to joining NIC he worked at Shelter Development in investing/acquiring, financing, and asset management for over $1 billion in assets. He also had key roles in the value creation and strategic planning and analysis for over 65 entities. He received his Bachelor of Business Administration in Finance from the College of Business and Economics at Radford University and his Master of Science in Finance from Loyola College in Maryland. He also holds the Chartered Financial Analyst Designation (CFA).

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